It seems as though you covered most of the issues making the jump to wireless only phone service. You are spot on regarding perhaps having your sister hesitate before jumping into an iPhone as the sole device. It certanly would not be my choice to replace a landline. But I know people (mostly who live in very strong ATT service areas) who have done just that.
Addressing your comments inline:
1) With UMTS/WCDMA, you can indeed talk and surf at the same time. That's not going to be an issue with the technology ATT uses since they have many handsets that can facilitate this need. FWIW, I have Skype on both my ATT Tilt (HTC 8925) & home laptop. I've had voice calls come in while using Skype on my phone. The Skype call quality is better on my home (Comcast) broadband connection though.
2) I've yet to meet someone who was charged for data using an iPhone. Will your sister also have DSL/Cable internet or only 3G broadband that she tethers a PC to?
3) This is a non-issue. People with newer handsets do receive 911 service and locations are found quickly.
4) When my folks made the jump, the DISH salesperson tried to convince them that they needed their landline but I did a little research and realized this was false. You can get the updates in other ways. Cable does not require landlines, FWIW.
5) Yes, this may be true.
6) True regarding the POTS system having its own power supply. OTOH, cell sites normally have commercial power backup systems that are secure, unless you build them too low to the ground like the did in New Orleans after the hurricanes and subsequent flooding ;(. She's in Hotlanta, so I bet it's a little better supported, infrastructure wise.
You are correct regarding the simplicity of grabbing a backup phone. I always tell folks with a primary PDA or smartphone to also pick one up right away so they don't have such a hassle to deal with later on. It's also helpful to have an extra SIM card if you use a GSM carrier so you don't have to go through so many hoops later on should one drop in the toilet or lake ;). They're inexpensive and make it easy to activate by calling ATT CS. You can also go one step further and backup all contacts from the SIM to a PC and update/sync later on w/ software depending on which phone/OS you are using. Plenty of options to make the whole experience much more smooth.
I know a few folks who have abandoned landline phones completely. I can't do that because cell coverage at home is awful, but my sister-in-law (from Atlanta) is considering dropping the landline and switching to an iPhone. She asked me about issues with the switch because I'm the closest thing to a tech guy in the family. I know nothing about iPhones except that AT&T has bad enough service where I live that some of the AT&T sales guys use Verizon phones. I tried searching for discussions about landline replacement here in the forum but I didn't come up with anything very recent so I thought I'd solicit ideas.
My off-the-cuff answer is that there are several things to consider:
(1) With many cell phones, if you use the phone as your computer's broadband access device you may not be able to talk on the phone while you are connected to the computer. I don't know if you can use Skype on the computer while using a tethered phone as a modem.
(2) Depending on how much data you use, the charges can be pretty high. Carriers vary a lot and I don't know how ATT is setting this up. I've heard that some iPhone plans have unlimited data, which would be a good thing. My Verizon data plan DOES have some limits on monthly bandwidth.
(3) Emergency services (911) can locate you using a cell phone but the location is not always very accurate. If you are at home in an emergency they can be a lot more certain of your location if you call 911 on a landline.
(4) I'm not sure if this is still relevant, there was a time when some TiVO, satellite and cable connections required phone access from time to time for software updates or billing stuff. I don't remember the details and it may not be true nowadays.
(5) If you have a burglar alarm you may need to keep a landline.
(6) Copper landlines frequently work even during a power outage but you can't charge a cell battery then, and I don't know how long the cell towers go after a power failure. In my case this is moot because with fiber-to-the-home I don't have landline service for very long after the power goes out. I don't know about her, though, she may still have copper service.
The other big downsides to losing the landline relate to limitations of cell phones. If you lose your cell phone it can take a while to replace it. If you don't have a landline that could be awfully inconvenient. I guess that in a pinch you could go to Wal-Mart and get a prepaid phone to use for a few days if you had to. You also have to consider whether or not you will always have a fully charged battery. Some heavy cell users find that their batteries drain faster than expected.
OK, so that's my laundry list of things that I thought up or that I gleaned from other comments. Are there other issues I haven't listed? Feedback from people who actually made the jump would be really helpful.